INS 22 Chapter 02
Transcript of INS 22 Chapter 02
-
7/28/2019 INS 22 Chapter 02
1/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 1
2. Personal Auto Insurance
Compensation of automobile Accident Victims
No-Fault Automobile Insurance
Automobile Insurance for High Risk Drivers
Automobile Insurance Rate Regulation
-
7/28/2019 INS 22 Chapter 02
2/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 2
Automobile Insurance Compensation
Compensation of Auto Accidents
o The Tort Liability
o Financial Responsibility Laws
o Compulsory Insurance Laws
o Uninsured Motorists Coverage
o Underinsured Motorists Coverage
o No-Fault Laws
-
7/28/2019 INS 22 Chapter 02
3/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 3
Automobile Insurance CompensationTort Liability
Tort Liability System is the traditional and most commonly used method of
seeking compensation for injured auto accident victims in the USA.
The injured auto accident victims must prove that another party was at fault before
they can collect damages from that party.
-
7/28/2019 INS 22 Chapter 02
4/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 4
Advantges and Disadvantages of Tort Liability
Advantages
o Remedy/Compensation for Victims of negligent or irresponsible drivers
o Victims are compensated thier Costs and are allocated to the resposible Party
o An incentive for drivers to act resposibly
Disadvantageso Time Delays in Settlement
o Significant legal and administrative Costs
o Amount of Punitive Damages
-
7/28/2019 INS 22 Chapter 02
5/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 5
Automobile Insurance CompensationFinancial Resposibility Laws
Requires Motorosts to provide proof under Certain Circumstances, the ability to
pay, up to a certain minimum amounts, for damage or injury that might cause as a
result of Operating vehicle
Various Circumstances
o After the occurence of auto accident involving bodily Injury or
o property damage exceeding certain dollar amount
o After Conviction for certain serious offenses
o Upon failure to pay a judgement that results from auto accident
-
7/28/2019 INS 22 Chapter 02
6/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 6
Disadvantages ofFinancial Resposibility Laws
FRLs are effective only after an accident, a conviction or Judgement
Dont guarantee payment to all accident victims because of
o Uinsured , hit-and-run, drivers of stolen Car
Delay in Compensation
Injured persons might not be fully indemnified for their injuries
-
7/28/2019 INS 22 Chapter 02
7/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 7
Compulsory Insurance Laws
Law that requires the owners or operators ofautomobiles to carry automobile liability
insurance atleast equal to certain minimum limitsbefore the vehicle can be licensed or registered.
-
7/28/2019 INS 22 Chapter 02
8/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 8
Problems in Compulsory Insurance LawsNon-guarantee of Compensation to all victimsInsufficient ProtectionDelay in CompensationDoesnt reduce the number of UI MotoristsRestriction on Insurers freedom to chose good insuredsUnfailrly high Rates for good driversDoesnt help in reducing the number of accidents
-
7/28/2019 INS 22 Chapter 02
9/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 9
Unsatisfied Judgment Funds
-
7/28/2019 INS 22 Chapter 02
10/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 10
Unsatisfied Judgment Funds
Compensation from fund after judgment and with the Proof that thejudgment cant be collected
Compensation amount is limited to States minimum CompulsoryRequirement
Negligent driver is not relieved of the legal liability even after Victim iscompensated from Unsatisfied Judgment Fund ( License is revoked untilnegligent driver reimburses the fund)
-
7/28/2019 INS 22 Chapter 02
11/31
-
7/28/2019 INS 22 Chapter 02
12/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 12
Underinsured Motorists Coverage(UIM)
-
7/28/2019 INS 22 Chapter 02
13/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 13
Underinsured Motorists Coverage(UIM)
Limits of the negligent driver are less than the injured persons Coverage
Increase Level of protection
UIM may not be insufficient to cover all the expensesIncreased cost of Insurance-Victim is paying for the negligence of others
-
7/28/2019 INS 22 Chapter 02
14/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 14
Uninsured Motorists Coverage(UM)
Injury Caused byUninsured driverHit and Run DriverA driver whose insurer is insolvent
DisadvantagesIncomplete Compensation
Establishing legal responsibility on the negligent driverProperty Damage exclusionBurden on the Insured for the actions of negligent driver
-
7/28/2019 INS 22 Chapter 02
15/31EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 15
No-Fault Auto Insurance
-
7/28/2019 INS 22 Chapter 02
16/31
-
7/28/2019 INS 22 Chapter 02
17/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 17
No-Fault Insurance Types
Types of No-Fault Laws
o Modified No-Fault Laws
Monetary threshold
Verbal threshold
o Add-on Plans
o Choice No-Fault Laws
Selection of No-Fault Coverage
Non-Selection of No-Fault Coverage
-
7/28/2019 INS 22 Chapter 02
18/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 18
No-Fault Laws
Arguments in Favor
o No need to determine the person at fault
o Eliminate inequalities in Claim payments
o Correcting the limited scope in current Tort System
o Decreasing the cost of Claim investigation
o Avoiding delays in Claims
-
7/28/2019 INS 22 Chapter 02
19/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 19
No-Fault Laws
Arguments aginst
o Defects of Tort Liabilty exaggerated
o Claims of premium Savings are exaggerated
o Penalization of Safe Drivers
o Payments doesnt include for pain and Suffering
o Needs reforms in Tort System and not replacement
-
7/28/2019 INS 22 Chapter 02
20/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 20
Auto Insurance in Residual Market
-
7/28/2019 INS 22 Chapter 02
21/31
-
7/28/2019 INS 22 Chapter 02
22/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 22
Automobile Insurance for High Risk Drivers
Automobile Insurance Plans
o Once werecalled Assigned Risk Plans
Joint Underwriting Associations(JUAs)
Reinsurance Facilities
-
7/28/2019 INS 22 Chapter 02
23/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 23
Automobile Insurance Plan Characteristics
Proof of securing the insurance in standard market ( Timelimit 60 Days)
Minimum Limits -> States financial Responsibility laws mandates
Coverage Restriction to some people
o Covicted of felony in last 36 months
o Engaged in illegal activities
o Habitual Violators
High Premiums
-
7/28/2019 INS 22 Chapter 02
24/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 24
Rating of personal Auto Insurance
Rate Regulation, Including underwriting
Matching Price to Exposure
Competiion among Insurers
-
7/28/2019 INS 22 Chapter 02
25/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 25
Motor Insurance Underwriting
Primary Rating Factors
Secondary Rating Factors
-
7/28/2019 INS 22 Chapter 02
26/31
-
7/28/2019 INS 22 Chapter 02
27/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 27
Motor Insurance Underwriting Factor- Age
Accident rate is more in age group 25-34
More young drivers are involved motor vehicle crashes than that of
older drivers
Death Percentage is more for teenagers in timings 9 PM- 3 AM
Young driver accidents are due to their inexperience and immaturity
-
7/28/2019 INS 22 Chapter 02
28/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 28
Motor Insurance Rating Secondary Rating Factors
Secondary Rating Factors that influences the Underwriting are
o Driving Record
o Type of Vehicle
o Number of Vehicles
o Deductibleso Liability Limits
o Discounts
o Good Student Discount
o Driver education Credit
-
7/28/2019 INS 22 Chapter 02
29/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 29
Motor Insurance Rating -Discounts
Other Discounts and CreditsAnti-Theft Devices
Passive Restraints
Defensive Driving Courses
Senior Citizens
Farmers
Nonsmokers
Number of Years of Continuous coverage with Insurer(Renewal or Anniversary Discount)
Multi-policy or Account Discount
Reduced vehicle use by Students
-
7/28/2019 INS 22 Chapter 02
30/31
EVENT/CLIENT NAME or Confidentiality statement 6/23/2013 7:04 AM New Brand FMT-P2 30
Motor Insurance Underwriting
Matching Price to Exposure
- Preferred
- Standard
- Non Standard ( Sub Standard)
-
7/28/2019 INS 22 Chapter 02
31/31